₦airaland Forum

Brass up! More reforms (TSanumis) coming !

[b]In what appears to be the first public endorsement by the Federal Government of the banking sector reforms being carried out by the governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, the Federal Executive Council (FEC) on Wednesday commended his efforts in repositioning the sector.
This is as the Central Bank of Nigeria (CBN) confirmed that it would undertake another round of banking consolidation to further stimulate and strengthen the nation’s economy.

Briefing State House correspondents after the weekly Federal Executive Council’s meeting presided over by President Goodluck Jonathan, Dora Akunyili, minister of information and communications joined by Labaran Maku, minister of state for information and communications, said “in order to further strengthen the financial sector and ensure its maximum contribution to the economy, the CBN is considering other banking sector regulation initiatives.

These will include the replacement of the current universal banking model with commercial, mortgage and non-interest banks with strong emphasis on corporate governance and board performance”. [/b]


http://www.businessdayonline.com/index.php?option=com_content&view=article&id=11217:sanusi-cbn-governor-gets-fgs-endorsement&catid=1:latest-news&Itemid=18
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RoadStar:
Why dint they offer Elumelu the position.

paddy_lo:
good question. . .perhaps he didnt have the right fulani connections?

^^ , not really valid questions for the topic at hand.

Is Sanusi brainless? - NO! Did he goof in implementation? - YES! Is he still capable of turning things around with the skills and resources at his disposal? - YES!
.

paddy_lo:
balls like idi amin dada of uganda?. . .we dont need another moronic brainless person that blusters about all day
we need ppl that have a brain. . .or at least half a brain in Nigerias case

That is why we celebrate nonentities like buhari in Nigeria. . . .a common illiterate that doesnt respect the laws of the land

Very funny . But are you saying someone that was a GM at UBA under Tony Elumelu is brainless?? An ED at First Bank?? And eventually CEO?? The guy was monstrously angry at the 'deposit looters' and understandably so, I don't agree with his methods and follow-on, but CBN as an institution has the capability within to chart a way forward if he chooses not to look outside. What he needs to do is to identify those within the CBN who can help him ring the changes in a non-abrasive manner.

Kobojunkie:
23 Billion dollars Worth? aaaahhhh!!!

Yes 23 Billion dollars worth which is not coming form govts. coffers! We need more refineries in Nigeria even if the existing ones were working at full capacity. As an oil producing country we ought also to be exporting refined petroleum products, as I am sure you are aware, processing and adding value is hugely profitable.

naijaking1:
^^^
We need more than balls to run the office of CBN governor, we also need brains.

I have already acknowledged that with the need to have advisers where he is lacking - he is a bit overzealous quite alright, but does not necessarily need a PhD etc to be a CBN gov. People without university degrees have been Presidents and Prime Ministers the world over (a bigger challenge than being a central bank gov.) and have performed well. He has had some grounding in banking and rose to become the CEO of First Bank. He was once a GM in UBA with Tony Elumelu as CEO who would have gotten rid of him if he thought he was incompetent. With the right combination of good management and communication skills coupled with 'PhD' advisers he should be alright.

'Balls' are what is lacking to a large extent in Nigeria, we have had people with a long list of qualifications in various positions in Nigeria but have lacked the 'balls' to push policies through or infact did not have any ideas at all!

What Sanusi needs is credible, competent and trustworthy advisers who would advise him accordingly in areas where he is lacking. He sure does have the balls needed to get things done!

^^ May well be,  but any development effort that sounds/seems viable, logical and well intentioned gets my vote,  in the midst of all the pessimism there should also be optimism.

neily:
How are u sure he is not already a member of nairaland?

Of course he will have 'agents' here already - but we are looking for username: Goodluck Jonathan 

What about Nairaland

The current refineries in Nigeria are still under the NNPC, the intrigues, politics, backstabbing, corruption etc that would be involved in order to get them back to full capacity is just not worth it. With this new initiative, they are building from scratch without the involvement of the characters in the current refineries fiasco. This project by the way does not stop the current refineries from undergoing any rehabilitation or repairs or even sale as the case may be. If the current proposals are sincere we may get the new refineries up and running while NNPC and Co. would still be bickering over the old ones that would still be in a comatose state.

The Kogi State one makes a lot of sense as this will serve the Middle Belt and the North and take a huge number of trucks off the roads which will hitherto have to travel 100s of KMs from Lagos or the Niger Delta to deliver petroleum products to these other regions - the pipelines already exist to transport the crude oil from the Niger Delta to Lokoja in Kogi State where the proposed refinery would be sited.

vigasimple:
Very well overdue.

Let me break it down.  Nigeria requires about 50,000mw of electricity. we have 36 states/787 local govt.

50,000mw divided by 36 =  1400mw approx, if they build 60mw per month, each state will complete it in 24months

50,000mw divided by 787 = 64mw per each local govt, again if they build about 3mw every month , they will do it in 24 months.

check out  www.nigeriansforsuperenergy.com   to see what is possible if we put our minds to it.

Good luck to Nigeria if Goodluck Jonathan has seen the light

Good idea! Although it will take a good many months to build a 60MW power plant.

The real issue here is the share price manipulation that was being perpetuated by the Market Makers, Banks, Dealers and Stockbrokers alike. Buying shares in itself is not necessarily a bad thing, but it is NOT an investment as they would like people to believe, it is more of an acceptable way of high profile legalised 'gambling'. Very, very few companies stocks are actually worth buying as an investment, there is very often a non correlation between the share price increase from say N10 to N40 (300% increase) for example and the performance of the coy over the same period or even for the foreseeable future. This is where market gymnastics come in.

Yes the CBN gov. is right in this instance to call it redistribution of wealth. The initial investment of N10 may help to create wealth (debateable though - as may end up in the pocket of the promoters), but from N10 to N40, predominantly, market hype, price manipulation etc takes over.

Suggesting that a share price increase from N10 to N40, without any fundamental economic basis relating to the company's performance or quantifiable future potential, is wealth creation is similar to saying a lottery programme or casino creates wealth.

nakedall:
He Mr. Ibori will soon convert to Muslim and receive moral support from the fellow brothers.

Definitely won't put that pass him! But trust the Dubai govt. to delay his 'official conversion ceremony' long enough for him to be extradited - they are neck-deep in debt

May end up serving 2 jail terms - one in UK and one in Nigeria. 


http://news.bbc.co.uk/1/hi/world/africa/8680569.stm

Nigeria ex-governor James Ibori arrested in Dubai 

The former governor of Nigeria's Delta state has been arrested in Dubai.

James Ibori is accused of corruption and laundering millions of dollars while in office by Nigeria's Economic and Financial Crimes Commission (EFCC).

Last month, police were attacked by Mr Ibori's supporters while trying to arrest the former governor in his hometown in the oil-rich Delta state.

The EFCC has attracted controversy in recent years - dogged by accusations of political bias.

EFCC head Farida Waziri told the BBC that Mr Ibori had been arrested on Wednesday following the intervention of the international police agency Interpol.

He is currently in custody and will be returned to Nigeria to face the charges against him.

Mr Ibori is also wanted for questioning in the UK.

This is not the first time the EFCC has tried to prosecute Mr Ibori.

In December 2009, a court in Asaba cleared him of 170 charges of corruption because there was no clear evidence to convict.

If Jonathan has his eyes on 2011, then this is a shrewd move. You cannot presently win the presidency in Nigeria without the support of the state Govs. So he has appeased them by choosing one of them, especially one that they are comfortable with and who is not known to be overly ambitious - but I won't be surprised if Sambo does not last long after the elections next year.

I have always been a supporter of the reforms being undertaken by Sanusi - and I still am. What I am against are Sanusi's methods which created unnecessary panic, criminalisation of bank loans and lack of confidence in the system. Banks in the western world had similar issues, but they went about it in subtle ways, and yes some CEOs were sacked as well, but importantly to a large extent they did it without funfare and in a way that did not erode confidence in the banks and bankers - which unfortunately was not the case in Nigeria.

It does now seem that beyond the reforms themselves that are been pushed through, there was no strategic plan in place to take care of the fallout which should have been expected and a well though out stimulant package to mitigate the effect of the reforms. The US and UK govts. for instance had to pump in hundreds of billions of dollars directly into the economy to pull their economies out of the impending depression that would have devastated their economies. Meaning he either takes on-board a sound economist as an adviser or go and brush up on his macro (and micro) economics knowledge or do the honourable thing and bow out.

Beyond these, is an issue that has not been brought to the fore yet - most of the crop of bankers we have in Nigeria are completely bereft of ideas! Yes there are some banks doing things in oil and gas etc, but most, beyond lending to traders, oil importers, for FMCGs and margin loans (these being the main stay of most of the banks) are unable to come up with ingenious, viable and sustainable products and services that would engage and encourage businesses and entrepreneurs to explore activities and sectors of the economy that would have a multiplier effect, and grow the economy by exploiting the vast business and investment opportunities available in virtually all sectors within Nigeria. Infact some bankers in all their years in banking have not come across products or services that are applicable to other sectors of the economy apart from those mentioned above.

So, even if funds were made available, in all probability, these bankers would just stare at each other and scratch their heads wondering what to do in the absence of their hitherto easy peasy bread and butter 30 - 90 days loan shark and 'kalo kalo' operations.

Hmm,  didn't realise we had so much in common,

"British High Commissioner Nick Westcott is not afraid to step in to controversy. Having boldly told us that Vodafone did nothing wrong in their acquisition of Ghana Telecom, he now lectures Ghana that incoming governments must respect contracts entered into by the outgoing government. Of course, that is true.
As a general point, it is a simple statement of the legal position. But we all know that Westcott did not mean it as a general point. He meant that investigations into contracts including Kosmos and Vodafone must be stopped. Otherwise, he warned, investor confidence would be damaged - a warning that foreigners would take their dollars elsewhere.

But what is the logic of this position? No government may question any contract entered into by a predecessor, no matter how corruptly? That if you are a dreadfully corrupt foreign businessman, who has bribed a minister, you only have to hang on until the government changes, and then you cannot be investigated? Plainly this is a nonsense.

One which particularly worries me is how, on the best oilfield in Ghana, Kosmos were able to get a royalty rate of only 5%, when the average on other fields is over 11%. There are suggestions that partners from EO were active on the Ghanaian government side of the negotiation. There are also credible stories of Kosmos handing EO millions of dollars in cash notes for "marketing and publicity".

Is Ghana forbidden from investigation because the government has changed? No, and they must not be bullied out of it by the British, Americans, IMF or World Bank. Those will always back wealthy Western companies against a developing African nation. The Vodafone deal suffered - at the very least - from a lack of transparency and a lack of a level playing field for others - including France Telecom - who wished to compete. The final sales price was definitely too cheap.

I would like to know how Ghana Airways' invaluable routes were awarded to GIA - a bunch of obscure and inexperienced investors who came only fourth in the official assessment of bids. The result has been the almost total disappearance of Ghana's whole aviation industry. I would like to know how industrial development funds were given to a network of companies the ultimate ownership of which traced back to the Minister of Industry.

The British High Commissioner has the problem entirely backwards. It is not that the government is not honouring existing contracts. I am chairman of several companies, including Atholl Energy. Atholl had a contract with the NPP government which has been honoured by the NDC government, because we carry out our work diligently and honestly.

The problem is that where contracts are not honest, action has not been fast enough or decisive enough to root out corruption. Two of the worst examples are in the energy sector. Let us look at the case of another British company, Zakhem International Ltd. They are building the Kpone Power Project for VRA. VRA bought the turbines from the manufacturer, Alsthom for US $70 million. They then paid Zakhem US $80 million upfront to install them and provide the ancillary equipment. After three years, what do Ghanaian taxpayers have to show for their US $150 million? Absolutely nothing. An empty field at Kpone, surrounded by Ghana's longest concrete wall so the Ghanaian public cannot see that their money has been stolen.

What is happening about it? Nothing, because Zakhem and their Ghanaian partners have stolen enough money to bribe all the officials involved. They are now claiming around town that the new government is also "In their pocket". Most of the $80 million has vanished forever, while the $70 million turbines are now badly damaged by disuse. Or look at Balkan Energy. They claimed to have spent $100 million on refurbishing the Osagyefo barge, at a time when they had really spent less than $10 million.

Under an astonishingly corrupt contract, Balkan are to lease the barge for $10 million per year, from the government of Ghana, but then charge Ghana over $40 million per year for its use as a "capacity charge". They will in addition charge the government of Ghana for the fuel, and make a profit on that too. It is as if I rented your car from you for 100 Ghana cedis a month, then rented it back to you for 500 Ghana cedis a month plus charging you a premium on all the petrol you use.

Balkan stand to make a total of about $1.5 billion dollars in profit from the people of Ghana from this terrible deal. It is the most corrupt contract I have ever seen. It is astonishing that a country like Ghana would enter into a contract with Balkan, whose owner, Gene E Phillips, has stood trial as a gangster in the United States. These are not crimes without a victim. Everyone who pays any VAT or other tax in Ghana is putting money into the pockets of these disgraceful conmen. Most of the taxpayers of Ghana are very poor, and the money is being taken by people who are very rich. That is why I am speaking out. I am not supporting any political party. I am supporting the ordinary people of Ghana.

I first spoke out about corruption in Ghana back in 1999, when I was Deputy High Commissioner there. It caused a sensation in the Ghanaian media at the time. But people do not know that I was nearly sacked by the British government as a result. The British government did not object at all to my attacking corruption in Ghana. The reason I was nearly sacked was because I said "Sadly some British companies have been involved in this corruption".

I was carpeted by the British government and told I must never mention British companies' corruption."

By Craig Murray

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=10501:the-united-kingdom-and-corruption-in-ghana-&catid=138:commentary&Itemid=358

, hmm, this will depend on the amount of land they are talking about here and the terms. Nigeria has about 30 million hectares of arable land, we currently use around 20 million of that (albeit not efficiently and effectively), that leaves us with 10 million hectares,  If we had strategic thinkers in govt. in charge of our agricultural policy, the best way to go about this would be to do an in-dept analysis of our future needs for arable land (both commercial, small scale and subsistence).

Once this first part has been done we now do a follow on analysis to determine how much of the remaining land we can/should give out after security and strategic considerations. Finally a financial analysis to project how much we will make as a nation if we farmed the land ourselves and exported the output - and then charge whoever is interested a percentage of their output in financial terms as our 'partnership' share or 'royalties'- similar to what obtains in the oil sector. So yes it could still have an element of leasing but, most definitely a revenue share agreement (forget profit share in this instance, they can 'validly' claim they are not making a profit for the next 20 years!).

I guess when Gaddafi sees things like this below he gets really, really 'mad' ,

“Call us crazy, but when we look at Africa we believe this will be the fastest growing part of the world,” said Jennings. “We believe that the highest investment returns . . . will be from this part of the world over the next 20 years.”

Jennings, who co-headed Credit Suisse First Boston’s investment banking operations in Russia in the early 1990s, is particularly optimistic about the prospects of Nigeria.

“We see Nigeria as a new Russia or Brazil in terms of the size you can get to. We wouldn’t be shocked to see [trading volumes] at the rate they have done in Russia,” he said.

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=9659:russian-bank-nears-brokerages-deals-in-push-to-dominate-africa-&catid=85:national&Itemid=340

Airport runways have been known to cost more that N64B (about $425M),

"The bill for the third Sea-Tac Airport runway, already one of the most expensive public works projects in the region, could reach $1.18 billion (N177B) -- about 50 percent higher than what the project penciled out at four years ago and more than double its original price tag."
http://www.seattlepi.com/local/128118_runway25.asp

, but the issue here is whether we need a half a billion dollar runway at Abuja Airport - the answer is no. I have not checked the exact specifics of this runway compared to others as above for example, but what I believe they are trying to do here is build a runway that is fit for an airport with probably 30 times the current capacity or traffic of Abuja - which makes absolutely no commercial or even common sense. Obviously we know what the end game is.

I don't believe anything would come out of it eventually. It looks to me like they might just playing to the gallery at the moment, once the public glare shifts they will find a subtle way to kill the case.

4 Play:
Why the exclamation mark? This budget goes to illustrate how poor Nigeria is. This is a $30bn budget for a nation of 150m+. On Wednesday, the UK, a country of 60m announced a budget of $1 trillion.

You forgot to the maths for them - that is N150 Trillion!!! (with well deserved exclamation marks  )

zabutt:
WOW, I have received nearly 20 emails since yesterday asking more information about the call centre. First of all, some people mentioned about customers trust on people calling from Nigeria etc etc etc. There is a little perception about the Nigerian fraud (419) or what ever you want to call it. But being Nigerian, you feel it more becuase you know more about it. Scammers are all over the world, and if people stop doing business in any country because of the reputation, then SHELL , EXXON, Microsoft etc will not be in Nigeria.
Also some mentioned that customers will not be comfortable talking to a person in Nigeria. But how would they know that the person they are talking is in Nigiera and not in UK. Because when the sales agent calls, he/she introduces himself/herself calling from ALLIANCE MAREKTING LTD, there is no mentioning of UK, Pakistan, India or Nigeria whatso ever.
On another note, what about the banks in Nigeria? Do they employee Nigerians or all their staff come from different palent? How many banks have been scammed by Nigerians working in their banks. If you want comparison, there are more scams by employees in Indian and in Pakistan than in Nigieria.

Nigeria is a very big player in Africa people should be proud of it. I can't say any more.
I must thank all of you who advised me on various aspects of the business.
I also got emails from people who told me that they have powerful connection in Nigeria.

I know couple of governors in Nigeria, chairman PDP lagos, Economic advisor of Musa yaradua and couple of other high ranking politician. I dont need them to help me setup a small call centre as there is no oil or gas there

This bit cracked me up.

Well done Zabutt, the way you are going you may get a position in the new cabinet  

Zabutt, I have to applaud your courage, determination and belief in Nigeria as a place you can do business. It is amazing that you come out here with a positive and progressive attitude and are ready to give Nigeria a chance, but the Nigerians themselves are the first to pull themselves down and tear each other apart!

I wish you the very best in your endeavour and I would be on the lookout in case I come across a possible solution to your requirements.

I agree with Sanusi on this. With all of his supposed faults, the man has some streak of genius and decisiveness in him. The western nations, especially the US and UK have tried repeated to introduce a semblance of what Sanusi is proposing through the front door, the back door, the roof etc without success. The powerful lobby groups that these banks employ have made sure these reforms do not see the light of day as they have made it clear that they are prepared to go to any length, whatever the cost to maintain the status quo (same way our corrupt politicians are prepared to unleash armageddon if their positions are threatened). In short they would make it political suicidal for any western political leader to insist on these changes, hence why Obama had to water down his approach.

Not all banks can be Universal Banks, nor indeed should be allowed to be UB without meeting the most stringent criteria. I believe where banks have universal banking licenses there should still be a separation of operations between commercial (traditional) banking and other aspects. The reasoning here is that they would be unable to use regular depositors funds to run their other speculative and high risk business which is the trademark of Investment Banking worldwide. Investment Banking operations should be funded from investment accounts and other sources who are in no doubt what their funds are to be used for and therefore aware of the risks involved. This is unlike the current situation where you put your hard earned money in a savings account for some future plans or a rainy day and a 'smart' Investment Banker uses these funds to play the market at your risk and then waits for a bailout (still at your expense) if the worst happens! Unacceptable!

Commercial banking is not risk free,  but it does not by a long shot compare to the level of risk investment banks are prepared to take. If I go into a casino to gamble, I know what to expect, not putting my money in a bank and it ends up in a casino!

If the story is true, this had to be done and done quickly. You cannot be President and not have control of your state. Coupled with his overt anti-Jonathan campaign and constant confrontation with Jonathan while he was VP - he does not stand a chance. He is probably corrupt and incompetent as well, but so are a host of other Govs, this looks most likely a pro-Jo move.

I believe the 'diversion' of part of the funds for the River Niger dredging to the coastline shoring in the Niger Delta was a deliberate action by Jonathan. Yes, the money for the shoring could have been found elsewhere, but I think actually using the funds earmarked already for the dredging was for 2 reasons:

1. To delay the dredging project overall - as they will have to source for new funds to complete it and as the 'President' he can always find ways to prolong the approval process.

2. To send out a message to those who planned and approved the project that they had not done their homework properly or worse still incompetent. That the right approach should have been shoring up the coastlines first then starting the dredging, hence reason one above which will give him the time needed to sort out the shoring.

This might not necessarily be the case but, I don't believe Jonathan would have taken this decision without some intellectual strategic positioning similar to that outlined above. Now who advised him is not clear at this stage. He could very well have had this at the back of his mind as one of the first things he would do if he is ever in a position to call the shots - which he now is.

This is sheer wickedness!! The man should be taken back to a specialist hospital asap! Is there no authoritative government official who can override Turai and get him back to hospital immediately? The game plan has failed they should have compassion and let him continue with his treatment.

The President of Nigeria living in an ambulance!!! This is beyond reproach!

Unfortunately this is how big business is conducted the world over. Political patronage is a key ingredient in securing lucrative contracts or licenses and its no different in Nigeria.

I can bet you though he is not the only one making such a kill in the oil industry in Nigeria, there would most definitely be some southerners and other northerners as well who have not and will not come out in open like Danjuma did.

I am beginning to incline towards seeing this as more of a failing on the part of Nigeria and the Nigerian govt. than an unjustified blacklisting by the US of Nigeria. The truth is our system and society as a whole is failing - we all live behind high security walls, cannot travel at night, do not trust one another, uncontrollable religious intolerance, multiple unsolved (un-investigated?) mass murders predominantly religion/ethnically motivated, proliferation of arms and bombs, crime-ridden haven, aggressive and widespread oppression, chronic obsessive compulsive corruption, no health care system, collapsed educational structure, police?, customs?, immigration?,    in-short a completely dysfunctional system.

The recent terrorist attempt by a Nigerian from an upper class family (unlikely combination) was the final piece of the jigsaw. As a Nation we have been slowly building up to this new found status which is not going to go away for a while. The US is most probably echoing what most other countries think of us but were not bold enough to say out loud. If this will enable or force us to look inwards then all the better for us. We should be a country where other nationals are queuing at our embassies to come into Nigeria and not the other way round. Infact Nigeria, if functioning at its full potential, may even need to import oil because our daily production of 2m or so barrels may be insufficient to meet domestic demand - industrial, transportation etc -  within Nigeria! I wonder if we ever ask ourselves what these other countries do with all the oil they buy from us. They definitely do not drink it - their economy does - and in turn churns out finishing goods and services which they then sell to us at exorbitant prices.

We now need to take the bull of Nigeria by the horn and subject it and us to a rigorous and thorough overhaul. The components and processes of this overhaul is a separate discussion on its own. Anyway am sure we will wake up one day in the not too distant future.

I believe Soludo should be given kudos for the consolidation exercise which was acclaimed as a success worldwide with the lowest cost as a percentage of GDP of similar exercises worldwide. But, he took his eye off the ball - inadequate monitoring and risk assessment, lax controls and regulations - basically getting carried away during the boom era.

Alas, he was not alone!  Mervyn King - Governor, Bank of England, Alan Greenspan (retired) - Chair, Federal Reserve Bank in America, and practically all Central Banks took their eye off the ball in the preceding 5 years or so leading up to the financial bubble in 2007! The US had to pump about a trillion dollars to stabilise their system - UK about a quarter of that. Although guilty as charged like his other counterparts, I guess we can give Mr/Governor (seems to have fallen in love with that title) Soludo a soft landing - even though he refused to accept the reality of the situation at the time.

Now to our other dear friend Mr Sanusi - doing the right thing - at the right time - but not exactly the right way. He came in and was initially very trigger happy. I believe he meant well, and after a few ricochets, has calmed down a bit but he should bode well for the banking industry in the final analysis.